I read over and over again how the industry needs a shakedown and that US and some other airlines (mostly US though) needs to go out of business for other airlines to start making money.

I agree with the fact that some airlines do need to go out of business, however I do not agree with that fact that US needs to be the one...I shall tell you why.

PS- I understand about the "free market" which this country has. This post is NOT questioning that, but instead it is questioning all those who say US should be the airline to go down.

1.) Effects
Let me ask you...how much will be gained by losing US. US does not in no means dominate the United States skies. If I'm correct, they only have about a 5% market share. Although that will help other airlines, it's not going to all of a sudden make UA or DL run through the meadows throwing money into the air, and what US does leave behind, it will be cobbled up by other airlines before somebody at Airliners.net could even post US is history. Just think about it. Who in his right mind wouldn't pick up some of US flights. They control routes that would even make a prime TWA or Pan Am jealous. The Northeast and Caribbean flights they have would make any airline CEO cry if they were given a chance to own them.

Summary
A US demise would have limited effects on the industry due to the fact that airlines would just take over their routes by growing, which cancels out the reason why US was to go out of business in the first place.

2.) Revolutionary changes at US
What many people do not realize, (or do not acknowledge) is that during the last few years, US has been going through revolutionary changes. Never before has an airline of this magnitude attempted feats this great, in this short of time. US, which has for many years prided itself on being an airline for the businessmen, is currently transitioning itself into being a LCC.

US, like all legacy carriers, had thought itself to be immune from LCC. That was until 9-11. From that day on travelers would stop flying. So in response they lowered their fares to draw them back, and it worked. But then comes the second problem, fuel. Fuel prices galloped to record highs, and they only to combat this is to raise ticket prices, and so come the third problem. LCC were flourishing due to the fact that their costs were low enough that they were able to make money at low fares, so they were able to grow, and grow they did. In response to this growth, legacy carriers had to keep fares low to keep passengers in their plane. Well, if fuel prices were so high, and fares were so low, legacy carriers naturally started to bleed money. They knew that they had to lower costs, so they did, but that still wasn't enough.

At about this time, US was in a crises. They had to act fast, or they would join many other greats in the graveyard. So they took a risk. They decided to do what many thought would be impossible. They would become a LCC.

So after a couple years, US is now starting to see the light in the tunnel, and although they see the light, they are still in bumper-to-bumper traffic. Victory is in their grasp, but they cannot celebrate too soon. They have gone through many hurdles, and at times when people said this would be the final straw, (yes Airliners.net "experts", you too) they have weathered through. They have lowered their cost dramatically, they have gone through a massive expansion (after a MASSIVE downsizing), and is in the current process of implementing low fares systemwide (and no, DL was not the first to do this).

Summary
Plain and simple, whether you love them or not, US has accomplished some amazing feats. (Although they had to because of the danger of nonexistence) Every other airline realizes what US has done and are eyeing their every move. Is US does indeed make it, every legacy in trouble will follow US examples. DL has realized this and is attacking US before they will win their victory, for they realize that after this ordeal is done, US will be in VERY good shape, and be a "lean, mean, money making machine", and one day be a threat towards DL.

3.) Sacrifice
I am convinced that no other airline employee's in history have give up so much for the good of the airline as US employee's have. (well most of them) Three rounds of cutbacks plus losing many benefits would make a lot of airline's employees strike, but not US. US employee's need to be given a hand for all the help they have given US, because without what they have done, US would be history.

Lately, with US turning around and foreign investors rumored to be looking at buying them out, I'd be more willing to believe that United will be the one to go out. They've been under ch.11 since 2002. At least USAirways has freed itself at some point from ch.11 since then, and is looking at another re-emergiance.

The United States is a free market society. When a company can't make money, they go out of business. The rules are the same for any company, in any industry. It's just the way it is. I'd hate to see any airline go simply for the sake of the employees, but we just have to accept that US Airways, United, any airline, isn't invincible...

Oops, when I asked the question, I didn't mean for it to be in that sense. I meant it to be why do people think US needs to be the one to go down. Sorry for the misunderstanding, I will try to clarify it more easily.

Hey friendly, if it was that easy.. We have Chapter 11 protection and huge bailout loans. Several carriers would have gone under if it wasn't for those two things.

Chapter 11 can be filed by any corporation. Like I said, the rules are the same for everyone. Bailout loans didn't save the airlines. US Airways has already defaulted, UA never got one, and Aloha, Hawaiian, and ATA have all entered Chapter 11 after receiving them.

SonOfACaptain:

Understood, sorry for the confusion. I think the reason everyone is looking down on US is that the management just doesn't care anymore. They are screwing their employees so much it's not even worth going to work anymore, but I respect all of the employees of US and UA, because they continue to give it their all, even when the situation looks bleaker than hell. There is also a very heavy amount of traffic on the east coast that would be reduced if US went, so that could be another reason. That, and people on this board just seem to like to hate things (look at all the anti-UA people).

I think US did the right thing throwing more flights onto higher fare Caribbean runs (SJU being a big exception fare-wise), and if they don't receive too much competition there with the resulting loss of revenue, that and the Shuttle should help bring in the funds to sustain them for a while.

I just don't buy the "too many airlines" argument. We've seen a lot of start-ups come and go along with watching the demise or take-over of a number of legacy carriers (including US Airways buying a couple themselves), yet many still complain the U.S. skies have too much capacity.

As Alfred E. Kahn, the father of deregulation, put it: "The eggs have been scrambled and cannot be put back together." A by-product of enabling a free-for-all in the domestic market meant that airlines would have to rethink how they did business and how they deployed assets. If an airline is successful in doing that, there's no reason for anyone to call for its demise. If it's not, then the free market system will deal with them otherwise.

I'm just surprised the widely expected shake-out period has existed 27 years.

I really enjoy US. As an east coast traveller, they are a perfect airline for this side of the country. There are about 15 different ways anygiven day to get me from say BUF to MCO. When I booked my flights on them for my spring break, their fares seemed reasonable and they gave me many options. I have flown US in the past and I have enjoyed their system. PHL and LGA are a little messy, but flying through PIT and CLT were a breeze. I am trying a DCA layover one way this year, and looking forward to see how that goes. Overall I think they still give that image of a classy airline. Perhaps it is their color scheme, or maybe it just has that reputation of being an airline flown by alot of affluent east coast buisnessmen, but whatever It is, the experiences I have had with them are truly enjoyable. It would be a shame to lose them, but alas the world keeps turning, and you either stay in the race and become innovative, or you stick to your gameplan without room for change. Whatever they decide will determine their success through these rough times.

maybe you're misunderstanding the reason that people say US will go out of business. it's not because we don't like US Airways. most people started predicting their demise the second time they entered bankruptcy in a few years. even if they are making huge and great changes, any company that simply can't turn around and make money fast enough is naturally going to get forced out of the market, and eventually forced out of business. no one just chose US to go out of business, and most of us on here have no control over whether they will survive or not, but they are clearly the worst-off airline in the United States right now, and have come very close to going out of business, so naturally people will make speculation and predictions about their failure.

with that said i hope that they will at least live till this summer because ive got a r/t on US to Providenciales via Charlotte in July!

I dont think ANY airline needs to go out of business to make other profitable. There are millions and millions of people to get to their destinations so PLENTY OF ROOM for many airlines........and if any should go, DEFINETLY not USAirways.

What could possibly make anyone believe that if one airline goes down mans/corporate greed will suddenly evaporate. Man will change his spots. Airlines will chase those seats with more. Carriers will be created to fill the vacuum. In a very few years nothing at all will have changed. It never has.

Sonofacaptain,
Why US airways?:
1. Partially US airways has generated animosity by charging airfares that are disproportionate in today's market. This has created less customer loyalty. Said high airfares make it easy, once gates are secured, for LCC's to fill their flights when entering US dominated markets.

2. For a decade, US airways has destroyed the wealth of its investors. Because of this, it is proving difficult for them to get bankruptcy exit financing. During their first bankruptcy, the pension fund of AK made a surprise investment; no one has stepped up for round 2. Without $250 million of fresh cash by June (or is it later?) they are gone.

3. They still have the highest costs in the industry!

4. The luggage debacle lost them the support of the press... advertising has value; US doesn't get it for free anymore.

I do not hate US airways, but in an established industry there will be consolidation down to a handful of competitors. Having high wages and low productivity in a free market is a doomed scenario. I would like to see them survive with free market compitition at all of their major airports. But... They just haven't been cutting costs as fast as revenue is dropping in this tough market.

I also agree that US disapearing won't change the market much. 5% of the market is an average year's growth.

1. Partially US airways has generated animosity by charging airfares that are disproportionate in today's market. This has created less customer loyalty.

US is in the middle of transforming itself into a LCC. Along with this, they have radically reduced airfares. Ever heard of GoFares. In a short while, they will be systemwide.

I understand that in the recent past, US has charged higher fares. But they weren't necessary charging any higher than other legacy carriers. You also have to realize that US was a businessman airline, and businessmen typically pay higher fares.

During their first bankruptcy, the pension fund of AK made a surprise investment; no one has stepped up for round 2. Without $250 million of fresh cash by June (or is it later?) they are gone.

Don't count them out yet, they still have plenty of time. Also, don't forget Texas Pacific also made a bid, so the fund of AL wasn't necessary out of the blue.

Besides, I personally think that once a company see how much US has lowered costs and how much they can compete in the future, they will provide some money.

3. They still have the highest costs in the industry!

Please don't tell my dad or any US employee this. You mean to tell me that after all they have sacrificed, that US still has the highest cost. I am pretty sure that US does NOT have the highest cost. In fact they have dramatically reduced it, and is somewhat comparable to some LCC

4. The luggage debacle lost them the support of the press... advertising has value; US doesn't get it for free anymore.

I do agree with this. Damn PHL baggage handlers. However, PLEASE do not judge US on this incident. It only happened because of a small group of babies who didn't realize the fragile situation at US.

I also think that a lot of US employees should be applauded for fixing the situation. They came from all over the country to fix the wrong doings of a few.

I do not hate US airways

I have no doubt that you don't hate them, I just don't think you are up-to-date with the current situation. A lot of changes of happened recently and it is impossible to compare the new US with the old.

Having high wages and low productivity in a free market is a doomed scenario.

Once again, this has very much changed. In fact US employees are one of the worst paid, even worse that WN. They also have increased productivity drastically.

US Airways doesn't have to be the airline to go. With UA just as sick, and DL going in the same direction, it could be any of the 3. I, myself hope all 3 of the airlines survive, noone likes to see a company go under.

With all these threads on the demise of US and UA....has it really ever been discussed or even thought that maybe, just maybe.....we're too busy looking at two carriers and not all? US and UA are in court protection, and using these courts to get the cost savings they need. When these carriers emerge from court protection.....they will have costs below the others, leading us to believe they will have to scramble to get their cost down as well. When you look at the losses in the last quarter for UAL......we must factor in the costs of court protection as well, something let's say AA does not have. So the losses are not really worse than the other carriers of the same size. I'm starting to think maybe these two carriers are going to be the ones to pull thru and go on to profitability, while DL
hmmmm

FIRST ON THE ATLANTIC.....FIRST ON THE PACIFIC.....FIRST IN LATIN AMERICA...FIRST 'ROUND THE WORLD.....PAN AM!!

Yes....thanks to DL's recent fare action. This is a structural change in the pricing model of the whole industry. HP started it, US and AS continued it, but DL is the one who will make it stick everywhere.

"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

In terms of what you said about US's market share, they may have 5% systemwide, but that's mostly in the Eastern US, where DL is one of the dominant carriers. DL, CO, and US dominate the East and losing US would dramatically change the makeup at very lucrative airports, LGA, BOS, DCA, PHL, FLL, CLT, and IAD. This would only help; less capacity equals higher fares.

"So the losses are not really worse than the other carriers of the same size. I'm starting to think maybe these two carriers are going to be the ones to pull thru and go on to profitability, while DL
hmmmm"

What are you talking about? What indicates to you that UA and US are any closer to profitability than before? I don't see any of the US major carriers making money, not one of them is even close to it. DL's 5+ billion dollar loss was mostly paper money, but most people don't look at that aspect of it. Those paper losses are losses that won't be there next quarter. DL's losses will be much smaller next quarter than last quarter, their recent 1+ billion pay cut to pilots will cut losses dramatically. UA and US have a long way to go, as does everyone else. But DL's not doing as bad as you think. Their management is willing to implement fundamental and even detrimental changes in order to rationalize their costs, they'll survive.

GoFares going systemwide has nothing to do with DL. US already planned for it to go systemwide long before DL announced theirs.

I'm convinced DL lowered its ticket prices to put US out of business. Their costs are way to high to make money out of it. I think they did it because they are hoping US will go out before this prices will really kick them in the ass.

Finally a "real" topic to discuss.... I think as of right now they are headed in the correct direction. The only thing I wish they did was not go airbus. NOT because I dislike airbus but by now they would have one of the most common fleets in the industry... 737, 75/76. Maybe instead of the 330 they could of gotten 76-300's. This would of also have lowered costs within the airline. Common fleet's are the best. I hope someone steps up to the plate with the extra $250 million because I want airways to stay around. They are a excellent airline with some more kinks to work out and I have to say out of ANY airline they always have the nicest crews and with what they have always prvide the best service.

Another thing is once they start getting more crj-700's and 170's I think they should use more mainline jets to move out west if they only had more wide bodies they could expand more into South America. Especially out of FLL. I really hope they stay with us. FLY THE FLAG!

One of the great problems and advantages of US is that they have a number of airports (LGA, DCA) where major players and serve many smaller east coast cities (Buffalo, Rochester, and even smaller cities, etc.) that other companies don't or won't serve. Those are also very high costs locations, with enough competition from other airliners, modes of transit, that they are limited in their ability to maintain prices to make money. This is what kills US and their ability to survive. While I don't want them to fail, if their current plans to expand and give more direct or non-stop services to/from the Carribbean and other markets from those not served by CO, UA, AA, etc without multiple connections doesn't pan out, then they are in trouble.

It doesn't matter what anyone will gain or lose by US Airways' demise. It's irrelevant - no-one's "picking" an airline to vanish. It's a simple matter of economics. If you can't make money, you collapse. You don't gain credit for past performance or the effort of your staff (and most airlines can claim to have staff just as willing to make sacrifices) - you're only as good as your last balance sheet.

As I see it your reasoning is based purely on some idealistic notion of "fairness" and has nothing to do with economics which - like it or not - is the only currency in the air transport industry.

If you want to be sentimental and wring your hands, get out of the airline business because you're not tough enough for its realities.

What many people do not realize, (or do not acknowledge) is that during the last few years, US has been going through revolutionary changes. Never before has an airline of this magnitude attempted feats this great, in this short of time.

Sure they've made some changes, not "revolutionary."

US, which has for many years prided itself on being an airline for the businessmen, is currently transitioning itself into being a LCC.

Tell that to the people that pay $1200 to fly out of CLT.

I am convinced that no other airline employee's in history have give up so much for the good of the airline as US employee's have.

Not sure on that one.

US, like all legacy carriers, had thought itself to be immune from LCC. That was until 9-11.

Not true, a lot of the airlines were bleeding before 9-11.

Victory is in their grasp, but they cannot celebrate too soon.

Bwhahahaha! They have along ways to go.

I am pretty sure that US does NOT have the highest cost. In fact they have dramatically reduced it, and is somewhat comparable to some LCC

Pretty damn close to the highest cost.

however I do not agree with that fact that US needs to be the one

Who should go out of business then? Of course not daddy's airline.

25 Lockheed1011
: USAirways is not going down! USAirways will find investors first to fix it before any other US carrier. US has the advantage of having the eastcoast h

26 EA CO AS
: GoFares going systemwide has nothing to do with DL. US already planned for it to go systemwide long before DL announced theirs. Actually, it does. Whi

27 OttoPylit
: Sonofacaptain, I am sorry, but I have to agree with Backfire, no one is picking on an airline to vanquish, but its pure economics. If US can't make th

28 ScottB
: Sigh. Where do I start? "how much will be gained by losing US. US does not in no means dominate the United States skies. If I'm correct, they only hav

29 SonOfACaptain
: Well, I guess it's round three, and it looks like I have to go on defense lol. That's your opinion, but however, I do doubt the extent of your knowled

30 Midway2AirTran
: I agree that US has made some changes for the better along with its management, however their history does not help them. I used to avoid them almost

31 EA CO AS
: Well, I guess it's round three, and it looks like I have to go on defense SOAC, I admire your tenacity, but in this case that's like a boxer saying it

32 SonOfACaptain
: Ah but remember the truth can sometimes be the biggest liar. I'm not going to argue with your opinion, I just want you to know that I think otherwise

33 SprxUSA
: I pick US to go just because they serve the smallest area, and are one of the smaller carriers teetering in the USA. Most pax in the USA would not ca

34 EA CO AS
: I'm not going to argue with your opinion, I just want you to know that I think otherwise. And FWIW, I certainly hope I'm proven wrong! I'd hate to see

35 Lightsaber
: Sonofacaptain, Hopefully I'm totally wrong on US's cost structure. I'm going off numbers I've seen off the web. If they now do have the LCC cost basis

36 Allstarflyer
: SOAC, Overcapacity, I've read among the posts here, and I'm convinced, too, is not a big deal. One problem I have is that the US government is regulat

37 Fishe388
: I work for US Airways, and I would just like to point out that during the holiday US lost about 10,000 bags system wide. However, Many people overloo

38 PHLBOS
: US, like all legacy carriers, had thought itself to be immune from LCC. That was until 9-11. Not true, a lot of the airlines were bleeding before 9-11

39 SonOfACaptain
: Fishe388, I was just making sure you know I wasn't the one who said that. And yeah, I agree US got the short end of the stick. -SOAC

40 QuestAir
: These 'Downfall of US' threads are getting to be as numerous as the 'NW DC-9' threads!

41 EA CO AS
: US lost about 10,000 bags system wide. However, Many people overlook the fact that Comair in addition to canceling all of their flights the first thre

42 TomFoolery
: Hi all, This sounds like a nice heated conversation going on. Several points really got my attention. A businessman airline? - Is or was US originally

43 Alb222
: The point is that U.S. Bankruptcy laws are a joke. File Chapter 11, screw your vendors and double screw your employees and hopefully, when I don't hav